IMF gets $320 billion in new pledges to raise resources
International Monetary Fund Managing Director Christine Lagarde said she has received pledges worth about $320 billion so far to increase the fund?s lending resources.
Switzerland and a group of countries that were not named promised to contribute $26 billion, Lagarde said in an e-mailed statement yesterday. Poland agreed to pitch in another $8 billion. That adds to a combined $86 billion promised by Japan, Denmark, Norway and Sweden over the past three days and $200 billion from euro nations a few months ago.
?I am, of course, very encouraged by this strong demonstration of support for the fund, and I look forward to further commitments from our broader membership,? Lagarde said in the statement.
The Washington-based IMF is seeking to boost its lending capacity from around $380 billion to shield the global economy against any deepening of Europe?s debt turmoil. Recent pledges add momentum to Lagarde?s push, which she had to scale back last week amid demands for Europe to do more to fix its own woes and a refusal by the U.S. to chip in more money.
The IMF is trying to obtain ?$400 billion plus,? IMF spokesman William Murray said. That compares with earlier goals of as much as $600 billion. The lending amount will be lower than the total amount raised.
Debt Crisis
Europe?s two-year debt crisis reignited this month to add urgency to the IMF?s call as Italian borrowing costs rose and Spain?s 10-year bond yield approached the level at which Greece, Ireland and Portugal required bailouts. While the IMF raised its forecast for the euro-area economy April 17, saying it will shrink 0.3 percent this year compared with a previously estimated 0.5 percent contraction, chief economist Olivier Blanchard said ?one has the feeling that at any moment things could well get very bad again.?
The countries that were not named ?will formalize their individual commitments in the coming days,? Lagarde said.
[Bloomberg]
